Tax protest to hijack Starbucks outlets

Chain's outlets to be hijacked by protest group which says company's avoidance tactics lead to cuts in social services, particularly for women

PUBLISHED : Tuesday, 13 November, 2012, 12:00am
UPDATED : Tuesday, 13 November, 2012, 5:59am

Dozens of UK Starbucks branches will be turned into creches, refuges and homeless shelters, as direct action group UK Uncut hijacks the coffee outlets to highlight the chain's tax avoidance tactics.

The action was announced to coincide with yesterday's scheduled grilling of a top Starbucks executive by the House of Commons' public accounts committee over the firm's tax obligations. The company paid no corporation tax in the UK during the past three years, despite senior management in the United States trumpeting the company's profits in Britain.

Controversy erupted over the taxes paid by multinationals in Britain after an investigation by Reuters last month revealed the world's biggest coffee chain paid only £8.6 million (HK$105.98 million) in UK tax over the past 13 years, during which it recorded sales of £3.1 billion.

In addition to Starbucks' chief financial officer, Troy Alstead, MPs will also question management representatives from Google and Amazon, which have also faced criticism for basing their European operations in countries with lower tax rates, such as Ireland and Luxembourg.

In a similar session last week, MPs accused HM Revenue & Customs (HMRC) officials of having cosy relationships with big businesses. Speaking about the arrangements with Starbucks, the Conservative MP Richard Bacon said: "It smells and it doesn't smell of coffee. It smells bad."

UK Uncut will start targeting Starbucks on December 8, the week Chancellor George Osborne delivers his autumn statement. The campaign group wants to draw a link between government cuts, in particular those affecting women, and tax avoidance by multinational firms.

Sarah Greene, a UK Uncut activist, said funding for refuges and rape crisis centres faced cuts unless companies paid their fair share of tax. HMRC estimates around £32 billion was lost to tax avoidance last year.

Greene said the government could easily bring in billions that could fund vital services by clamping down on tax avoidance, but was instead "making cuts that are forcing women to choose between motherhood and work, and trapping them in abusive relationships".

The group, which rose to prominence after staging a sit-in at Vodafone stores, Topshop and Fortnum & Mason, turned its attention to Starbucks last month after the Reuters investigation.

Longstanding Uncut campaigner Anna Walker said the group wanted to "galvanise the anger" women were feeling: "We've chosen to really highlight the impact of the cuts on women this time. So there is going to be a focus on transforming Starbucks into those services that are being cut by the government ... [such as] refuges and creches," she said.

Walker said the campaign group had been in touch with women's groups across the country in the lead-up to the direct action event and believed that, along with a pre-established network of activists, dozens of the company's coffee shops were likely to be targeted.

"Starbucks is a really great target because it is on every high street across the country and that's what UK Uncut finds really important: people can take action in their local areas," she said. "We're really hoping that women who are impacted by the cuts, who are seeing their Sure Start centres where their kids go being reduced in services, and people who use refuges, [will] be involved."

The coffee store chain insists it pays the correct level of taxes. Starbucks' chief executive Howard Schultz has said in a statement: "Starbucks has always paid taxes in the UK, despite recent suggestions to the contrary. Over the past three years alone, our company has paid more than £160 million in various taxes, including national insurance contributions, VAT (a sales tax) and business rates."